Amazon India Cuts Referral Fee On Products Under INR 300

Amazon India Cuts Referral Fee On Products Under INR 300

  • 24.03.2025 08:11
  • inc42.com
  • Keywords: Amazon

Amazon India has reduced referral fees to zero for over 12 million products priced below INR 300 across 135 categories, effective April 7. This move aims to support small businesses and boost seller growth on its platform, following a previous fee reduction in September last year.

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Amazon India is cutting referral fees to zero for products under INR 300, aiming to boost seller growth and support small businesses.

Context

Amazon India Reduces Referral Fees: Key Insights and Market Implications

Fee Reduction Details

  • Zero referral fees applied to over 12 million (1.2 crore) products priced below INR 300.
  • Affects more than 135 product categories, including home decor, grocery, jewelry, apparel, and shoes.
  • Effective date: April 7.

Historical Context

  • Second fee reduction in eight months:
    • September last year: Reduced fees (3-12%) for 59 product categories.

Fee Structure Changes

  • Referral Fees: Eliminated on qualifying products; previously ranged from 2-4%.
  • Flat Rates Simplification:
    • National shipping rates reduced by 16%, starting at INR 65 (down from INR 77).
  • Weight Handling Fees: Reduced for lightweight items (<1 kg) by up to INR 17.

Strategic Objectives

  • Boost seller growth and support small businesses.
  • Enable sellers to offer wider product selection and competitive pricing, particularly on low-value items.

Financial Performance

  • Amazon Seller Services revenue: INR 25,406 Cr in FY24 (up from INR 22,198 Cr in FY23).
  • Net loss narrowed by 28.5% to INR 3,469.50 Cr in FY24.

Market and Competitive Dynamics

  • Amazon aims to strengthen its position as a preferred platform for SMEs.
  • Potential competitive response from other e-commerce players adjusting fee structures.
  • Focus on attracting more sellers and increasing market share.

Long-Term Effects and Industry Impact

  • Likely sustained seller growth and enhanced customer satisfaction through better prices and selection.
  • Regulatory scrutiny may increase to monitor anti-competitive practices, though current focus is on SME support.

This strategic move by Amazon India underscores its commitment to fostering economic growth and entrepreneurship in India while enhancing its competitive edge in the e-commerce sector.